I know interest rates are historically low, but I am still having trouble deciding. We are selling our NYC coop apartment for $800K and buying a house in the suburbs for about the same amount. We currently have a paid off mortgage so we could buy the new house with cash. IF it's the right thing to do.

The property taxes on the house are $18K/year. So that would enable us to take that deduction even without a mortgage interest deduction. Our HHI is about $130K and is unlikely to rise very much. We are 46 and 50 years old. We have two kids (7 and 3) and 529 college savings of about $150K. We have savings/investments of about $800K. Paid off car, no credit card or other debt...